Obamacare's bill for small businesses? Big bucks, fewer jobs

Obamacare is taking a toll on small businesses, according to a new analysis of the effects of the health-care reform law, which found billions of dollars in reduced pay and hundreds of thousands fewer jobs.

Take-home pay at small businesses was trimmed by some $22.6 billion annually because of the Affordable Care Act and related insurance premium hikes, researchers at theAmerican Action Forum, a center-right think tank headed by former Congressional Budget Office director Douglas Holtz-Eakin, found in areportreleased Tuesday.

Individual year-round employees at businesses with 50 to 99 workers lost $935 annually, while those at firms with 20 to 49 workers are out an average of $827.50 per person in take-home pay, the report found.

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That report also says that there has been the loss of more than 350,000 jobs due to Obamacare-era premium hikes at small businesses.

In five states, the losses have exceeded more than 20,000 jobs apiece, including Florida, New York, Ohio and Texas. California lost an estimated 42,788 jobs due to Obamacare, the report estimated.

And those wage and job-level effects have come before the implementation of Obamacare's employer mandate, which beginning in 2016 will compel firms with 50 to 99 full-time workers to offer them health coverage or pay a fine.

"We find evidence that the labor force is absorbing these detrimental costs even before the government has started enforcing the most stringent ACA regulations," the report said. "These costs are likely a result of businesses preparing for the employer mandate, providing health insurance to workers and losing access to low-cost coverage."

"Obviously, these are huge numbers," lead author Sam Batkins said about the findings.

And because of the employer mandate coming down the road, "we expect the trends to worsen," Batkins added.

Batkins said the research detected a marked response at small businesses to insurance premium prices after the implementation of the ACA in 2010, in contrast to how those employers responded to price hikes before the law was adopted. Specifically, there was a correlation between small businesses' cutting jobs and workers' take-home pay being reduced when premiums went up after the ACA took effect, as opposed to before.

"While there was no significant relationship between health-care premiums and employment before the ACA, since 2010 small businesses have slowly started shedding jobs and reducing wages," the report said.

Batkins said, "The data sort of points to the law itself. ... Post-ACA, the trends are pretty stark in terms of reduced employment and reduced take-home pay."

For instance, for every 1 percent increase in total premiums paid for insurance for workers at firms employing 50 to 99 people, there was a 0.109 decrease in average weekly pay since the ACA, the report said. Before the ACA was passed, "we do not identify any statistically significant relationships" between wages and health premiums, the report said.

"Although the estimates might appear small, when one considers how premiums have changed since the ACA, the costs are profound," the report said. "Pre-ACA, total premiums in the average state cost $4,653 in 2009 and grew by 19.8 percent to $5,576 by 2013."

Asked if the overall costs to small business employment and wages are warranted by Obamacare's goal of providing affordable health insurance to millions of uninsured people, and of improving the quality of insurance offered to enrollees, Batkins said, "I think the jury is still out."

"This report has shown that the costs are fairly high," Batkins said. "And the enrollment is going to have to be fairly high, as well, to cover the costs."